Posts Tagged ‘cooperatives’

British Labor leader Jeremy Corbyn considers socialism—which he defines as “You care for each other, you care for everybody, and everybody cares for everybody else”—to be obvious.

As it turns out, socialism is increasingly obvious for folks on this side of the pond, too. Like Bernie Sanders. And Mark Workin and Melissa Young, who made the film Shift Change. And Richard Wolff, through Democracy at Work.

Now they’re joined by Shannon Rieger, a recipient of the Janice Nittoli “Forward Thinking” Award from The Century Fund.

Rieger’s argument is that, in the face of growing inequality (such that “the top 1 percent wage has increased by 138 percent since 1979, [while] the wages of the entire bottom 90 percent of earners have grown by the comparatively meager margin of just 15 percent—and an even more unequal distribution of wealth”), it’s imperative that the United States “develop policies that not only mitigate existing economic inequality and poverty, but that actually reverse these trends for the long term.”

And her proposed solution? Enterprises that are owned and managed by their employees.

By creating a policy environment to support and promote democratic employee-owned businesses, the United States could promote a more equitable employment system and a more just distribution of wealth. Doing so would not only help the country recover from the recent economic devastation of the Great Recession, but also begin to reverse the deep wealth and income disparities that have plagued American workers and families for decades.

Worker-owned cooperatives (which, across the world, employ more than 250 million people, and in 2013, generated $2.95 trillion in turnover) are a particular form of democratic employee-owned business that Rieger considers to have particularly rich potential in the United States.

But they need support, to “help grow the sector to scale.” So, as Rieger explains,

it is crucial that the United States establish a national-level regulatory framework for worker-cooperatives. Foundational components of such a framework could include a clear, universal definition for worker-cooperatives and a national worker-cooperative incorporation code; financial support mechanisms, such as a dedicated worker-ownership fund; and cross-sector partnerships with the existing decentralized network of employee ownership service providers.

Using examples from around the world (including the Marcora Law in Italy) Rieger makes the obvious case for the growth of democratic worker-owned enterprises in the United States.*

Worker-owned enterprises, as a key feature of a socialist transition from capitalism, are certainly obvious to me.

*The Marcora Law, which was passed in 1985, offers Italian workers an array of financial support options and a “right of first refusal” opportunity to purchase and re-launch troubled businesses as worker-cooperatives. As Rieger explains,

a U.S. worker-buyout policy modeled after the Marcora Law should become a component of federal-level policy framework for worker-cooperatives. By creating federal legislation that recognizes the worker-owned cooperative business as a distinct form of democratic employee-ownership, and that aligns existing state-level incorporation codes and the worker-ownership service provider network under universal regulatory guidelines, the United States could make a meaningful, effective commitment to expanding the democratic worker-ownership sector.

While we’re on the topic of democratic socialism, why not expand the definition—from improving the way the wealth of the nation is shared (e.g., by raising taxes on the one percent and strengthening the safety net) to exploring new ways of democratizing the enterprises where that wealth is actually produced (e.g., by promoting worker-cooperatives)?

The New Era Windows and Doors Cooperative has been in operation since 2013. It hasn’t been easy, but the worker-owners have learned together how to operate their own business. And then there were the meetings: “It was difficult to make decisions together,” Robles said. “But it’s kind of fun, because at the end of the day it’s for the benefit of everyone.”

Sales are modest, but growing. Last year the company sold about a half million dollars worth of windows. This year, they anticipate the number will be significantly higher. There are 23 worker-owners, and two staff members who Robles hopes will opt to become worker-owners.

His vision is for New Era to help spawn other cooperatives. Instead of expanding by hiring drivers, for example, he’d like to see the company help start a cooperative of drivers.

How is this company staying alive when other owners have failed? The worker-owners made tough decisions about what equipment they could get rid of to save money. And they did a lot of sales via word of mouth.

“The good thing is we don’t have the CEO making millions of dollars,” Robles said, “so we have the ability to compete with the industry.” Also, they don’t have to generate big profits to keep investors happy; they just have to make enough to pay expenses and pay back their debt.

One of the keys for success at New Era is it operates according to a different logic:

This business model is based on “enough.” Enough pay and benefits to live with dignity. Enough of the machinery that is necessary, but not the sort that is too expensive. Opportunities for employee-owners to draw on their full capacities, not to be relegated to repetitive work while a few make all the decisions and much of the money. Their more equitable pay structure creates opportunities for more people to have enough to live and thrive; instead of keeping some at the edge of poverty while others prosper.

This is what local power looks like: companies like New Era Windows and Doors creating the stability that comes with locally rooted employment, insulated from the speculative finance that, in the case of publicly traded companies, requires many jobs be moved to low-wage regions. These worker-owners focus on values, including the possibility for others to also be worker-owners, and the importance of producing ecologically smart products. The company prides itself on selling energy-efficient windows and doors, and customizing them to the climate and location of the client.

Worker-cooperatives have many obvious advantages over capitalist enterprises, and thus should be part of any contemporary definition of democratic socialism.

They can also solve the problem of capitalist education—in which, according to Einstein, “An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career.” Participating in a worker-cooperative means making decisions “for the benefit of everyone.”

And, if New Era is any indication, learning to do that can actually be fun!

The Wall Street Journal is absolutely right: Pope Francis acknowledges the scientific consensus concerning the human/social origins of climate change and argues there is “an urgent need” for policies designed to cut carbon emissions and switch to renewable sources of energy.

But the pope goes further by weaving his signature theme of economic justice and his vehement criticism of capitalism throughout the encyclical.

What the pope does is build on the central economic themes of the apostolic exhortation Evangelii Gaudium, and then extend them to the issue of the natural environment, especially the causes and consequences of climate change. The result is a radical critique of contemporary capitalism.

There are many aspects of the 183-page Laudato Si’ I simply cannot discuss here.* What I want to do in this post is highlight some of the specifically economic themes of the papal encyclical that was officially released yesterday.

Many news stories have already highlighted the pope’s rejection of carbon emission trading as a solution to the problem of climate change:

The strategy of buying and selling “carbon credits” can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors. (126)

But there is a great deal more in the economics of Laudato Si’.

Throughout the encyclical, the pope highlights the relationship between climate change and the “economy of exclusion,” particularly the way the continued deterioration in the natural (and, he doesn’t overlook, social) environment affects the poorest, most vulnerable people on the planet.** Here are two examples:

Many of the poor live in areas particularly affected by phenomena related to warming, and their means of subsistence are largely dependent on natural reserves and eco-systemic services such as agriculture, fishing and forestry. They have no other financial activities or resources which can enable them to adapt to climate change or to face natural disasters, and their access to social services and protection is very limited. (20)

And

One particularly serious problem is the quality of water available to the poor. Every day, unsafe water results in many deaths and the spread of water-related diseases, including those caused by microorganisms and chemical substances. Dysentery and cholera, linked to inadequate hygiene and water supplies, are a significant cause of suffering and of infant mortality. (23)

Not surprisingly, this leads to his reiteration of the preferential option for the poor:

In the present condition of global society, where injustices abound and growing numbers of people are deprived of basic human rights and considered expendable, the principle of the common good immediately becomes, logically and inevitably, a summons to solidarity and a preferential option for the poorest of our brothers and sisters. . .We need only look around us to see that, today, this option is in fact an ethical imperative essential for effectively attaining the common good. (117)

And that’s the other side of the focus on the poor: the idea that the natural environment is part of the common good.

Human ecology is inseparable from the notion of the common good, a central and unifying principle of social ethics. The common good is “the sum of those conditions of social life which allow social groups and their individual members relatively thorough and ready access to their own fulfilment [sic]” (116).

So, if it is clear that climate change is a pressing issue, especially for the poor and most vulnerable, what stands in the way of effectively dealing with the problem? Here the pope extends his economic analysis to identify the interests and ideas that represent obstacles to both thinking about and finding appropriate solutions to climate change.

The pope, for example, cites those who stand in the way of making real change:

Many of those who possess more resources and economic or political power seem mostly to be concerned with masking the problems or concealing their symptoms, simply making efforts to reduce some of the negative impacts of climate change. (21)

In the meantime, economic powers continue to justify the current global system where priority tends to be given to speculation and the pursuit of financial gain, which fail to take the context into account, let alone the effects on human dignity and the natural environment. (41)

He also challenges responses that benefit only a tiny minority:

Even as the quality of available water is constantly diminishing, in some places there is a growing tendency, despite its scarcity, to privatize this resource, turning it into a commodity subject to the laws of the market. (23)

In some places, rural and urban alike, the privatization of certain spaces has restricted people’s access to places of particular beauty. . .Frequently, we find beautiful and carefully manicured green spaces in so-called “safer” areas of cities, but not in the more hidden areas where the disposable of society live. (31-32)

In the end, of course, the pope has to confront the problems of profits, markets, and private property.

This is what he writes about profits:

The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration. (81)

Here he is on markets:

Once more, we need to reject a magical conception of the market, which would suggest that problems can be solved simply by an increase in the profits of companies or individuals. Is it realistic to hope that those who are obsessed with maximizing profits will stop to reflect on the environmental damage which they will leave behind for future generations? Where profits alone count, there can be no thinking about the rhythms of na- ture, its phases of decay and regeneration, or the complexity of ecosystems which may be gravely upset by human intervention. Moreover, biodiversity is considered at most a deposit of economic resources available for exploitation, with no serious thought for the real value of things, their significance for persons and cultures, or the concerns and needs of the poor. (139)

And then on private property:

The principle of the subordination of private property to the universal destination of goods, and thus the right of everyone to their use, is a golden rule of social conduct and “the first principle of the whole ethical and social order”. The Christian tradition has never recognized the right to private property as absolute or inviolable, and has stressed the social purpose of all forms of private property. (69)

Finally, it has been noted that the pope doesn’t offer much in the way of concrete proposals to solve the problem of climate change. But he does mention a number of times the positive effects of a particularly noncapitalist form of economic organization: cooperatives.

Liberation from the dominant technocratic paradigm does in fact happen sometimes, for example, when cooperatives of small producers adopt less polluting means of production, and opt for a non-consumerist model of life, recreation and community. (84)

And

In some places, cooperatives are being developed to exploit renewable sources of energy which ensure local self-sufficiency and even the sale of surplus energy. This simple example shows that, while the existing world order proves powerless to assume its responsibilities, local individuals and groups can make a real difference. (131)

Throughout the encyclical, the pope could not have stated things more clearly: the “maximization of profits” is destroying the natural environment, the “poor, the weak, and the vulnerable” are most at risk of pollution and climate change, and “halfway measures” simply won’t work.

No wonder the Wall Street Journal is concerned about the pope’s “vehement criticism of capitalism throughout the encyclical.” Many more people might actually come to believe him.

*What I found particularly interesting, in addition to the themes I write about here, are the pope’s criticisms of modern (scientistic) epistemology and the hyper-individualist (neoliberal) subject.

**To be clear, the pope is not just referring to the people in rich and poor countries: “There are not just winners and losers among countries, but within poorer countries themselves” (129). And, he might have added, within rich countries.

But workers around the world have also developed a new strategy: to take over the enterprises where they work.

In Turkey [ht: ja], for example, a subset of the 94 workers who were fired in January 2013 from the Kazova Textile factory in Istanbul eventually formed a worker-owned cooperative, Free Kazova. It is now in its third month of operation.

And, as the Guardian reminds us, many groups of workers in other countries—in Greece, France, Spain, and Argentina—are doing the exact same thing, taking matters into their own hands and showing they can organize and operate enterprises democratically, without the previous bosses and boards of directors.

Like this:

One of the themes of the conference this past weekend was a university mired in a crisis that has, at least in part, been created by the top-down management of boards of governors and academic administrators. So, there was a great deal of discussion of “unsettling the university” by forming unions and instituting more faculty governance.

However, otherwise dedicated and creative scholars had some difficulty imagining another alternative: the self-governing university. A university without bosses or, if you prefer, a university in which the workers are their own bosses.

As it turns out, that’s the topic of an essay by Shaila Dawan that was published while I was at the conference. She explains that, in the face of massive inequality (as analyzed by, among others, Thomas Piketty),

The oft-proposed remedy for this state of affairs is redistribution — namely, taxing the rich to benefit the poor. Piketty, in fact, proposes a global tax, one that can’t be avoided by private jet. Others want to raise the minimum wage. In contrast to those Band-Aids, worker co-ops require no politically unpalatable dictates. And by placing workers’ needs ahead of profits, they address the root cause of economic disparity. “If you don’t want inequality,” says Richard Wolff, the author of “Democracy at Work: A Cure for Capitalism,” “don’t distribute income unequally in the first place.”

Exactly. The same, of course, might be true in universities. Perhaps even more so, because our colleges and universities both include profound inequalities (e.g., among campuses, academic units, and individual faculty members and staff) and reflect the growing inequalities in the wider society (e.g., in terms of unequal access to different kinds of higher education).

Creating colleges and universities that are owned and run by their workers (both faculty and staff, mind you) can—just like the bakeries and other enterprises mentioned by Dawan—change the way education is produced and, particularly important, the way the surplus is appropriated and distributed. In both private and public universities, the faculty and staff produce a surplus that is appropriated not by themselves, as a group, but by their “bosses,” the small number of individuals who sit on boards of trustees or regents (who, in turn, hire the growing number of administrators who run the institutions on a daily basis).

What if, instead, the university workers made up their own board (or, in larger institutions, elected representatives to a board) and hired the university administrators? Such a board would directly involve the workers in appropriating and distributing the surplus they produce and mean that they—not a board filled with representatives of large business and political cronies from outside the university—would decide on the general parameters of how the university functions. The worker-board would then hire administrators to carry out those decisions on a daily basis.

I understand, there are no guarantees. But it’s certainly likely the worker-owned university (with new roles for both students, who have to work with professors to get a good education, and members of the larger community, who want their children to get a good education) would both include and create much less inequality than is the case right now. And, at the same time, they would work with others to improve the quality of higher education.

Now, that would be real unsettling of the university. And the people who work in our institutions of higher education know they don’t need bosses to accomplish that.

Like this:

Readers will remember that, in Evangelii Gaudium, Pope Francis developed a scathing critique of trickle-down economics and of the existing economy of inequality and exclusion.

How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

But, in that exhortation, the pope didn’t really address the issue of alternatives to contemporary capitalism. Now, he has—in the form of cooperatives.

In a recent audience [ht: db] with members of the Confederazione Cooperative Italiane,* Francis offered a practical alternative to the “throw-away culture created by the powers that control the economic and financial policies of the globalized world”: to establish new cooperatives and to strengthen existing cooperatives.

he spoke of the economy and its relationship with social justice and human dignity. Speaking of the need to “globalize solidarity,” he urged the confederation to bring co-operatives to the “existential peripheries” and to continue to be “prophetic” by “inventing new forms of co-operation.”

The Pope spoke of “a certain liberalism,” which “believes it is first necessary to produce wealth—and it does not matter how—to then promote some state redistribution policy.”

Others think it is up to a company to “bestow the crumbs of accumulated wealth” to those in need to then, in turn, “absolve themselves” of “their so-called ‘social responsibility’,” the Pope said.

“You run the risk of deluding yourself that you are doing good while, unfortunately, you continue only to do marketing,” without ever escaping the “fatal loop” of egoism, “which has the god of money at the centre,” he said.

Instead, the co-operative creates a “new type of economy” that allows “people to grow in all their potential,” socially and professionally, as well as in responsibility, hope and co-operation, he said. The Pope clarified that while he was not saying income growth is not important, it certainly “is not enough.”

*The Confederation of Italian Cooperatives is one of three cooperative organizations in Italy (the other two being the Associazione Generale Cooperative Italiane and the Federazione Nazionale delle Cooperative). Catholic-inspired cooperatives were originally part of the Federazione, which was founded in 1886, but then then they left to form a separate organization in 1919. In the 1920s, the fascist government opposed all cooperatives and cooperative unions and the various cooperative organizations at the time were disbanded. After World War II, the cooperative organizations were formed once again.

Like this:

This is a short, practical guide for those considering worker-owned cooperatives, made by GRITtv & TESA, the Toolbox for Education and Social Action. It features conversations with worker-owners fromNew Era Windows, Union Cab, Ginger Moon, Arizmendi Bakery, Anti-Oppression Resource and Training Alliance (AORTA), and more.

The quote in the title is from Ricky Macklin, of New Era Windows (at 7:11):

All of our lives we had been told that we was only this and we was only that. And New Era Cooperative allowed us to see that we was much more than that.